US Cyber Fraud: Three Men Accused of $4m Insider Deal
Three Chinese citizens accused of hacking into computers of American law firms advising on company mergers have been charged with multi-million dollar cyber fraud in New York.
Prosecutors said the trio made more than $4m by using information they obtained through hacking into some of the top law firms.
They profited by buying stock in firms imminently about to be acquired.
One of the defendants has been arrested while the other two are still at large.
Manhattan Attorney Preet Bharara warned the case should serve as a wake-up call for law firms who now have to worry about cyber fraud in addition to the threat posed by a rogue employee making money out of forthcoming mergers and acquisitions.
The three Chinese men have been charged with conspiracy, insider trading, wire fraud and computer intrusion.
They are alleged to have made investments based on information obtained from hacking into unnamed law firms working on merger deals, by posing as information technology analysts. The trio are alleged to have targeted the email accounts of individual law firm partners.
One of the suspects, Iat Hong, from Macau, was arrested on Sunday in Hong Kong and is reported to be awaiting extradition. The others were named as Bo Zheng of Changsha, and Chin Hung of Macau.
Lawyers for the trio have not so far commented on the allegations against them.
They targeted at least seven New York law firms in their efforts to obtain information about forthcoming deals, The New York Times reported.
The newspaper said they were “extraordinarily active in pursuing information” and quotes the indictment against them as saying that between March and September 2015 they “attempted to cause unauthorised access to the networks and servers of the targeted law firms on more than 100,000 occasions”.
The indictment says that among the deals the trio are alleged to have profited from was the acquisition of e-commerce company Borderfree by Pitney Bowes Inc and Intel Corp’s purchase of circuit manufacturer Altera Corp. Both were completed in 2015.
Courtesy : BBC
Image captionManhattan Attorney Preet Bharara (pictured) has warned the latest case should serve as a wake-up call for law firms